Car Finance / EPA and DOT Propose New Fuel Economy Labels

EPA and DOT Propose New Fuel Economy Labels
Cast Your Vote on the EPA's Proposed Fuel Economy LabelsThe Environmental Protection Agency (EPA) and the Department of Transportation (DOT) have unveiled two proposed fuel economy labels that would appear on the window stickers of new vehicles, including one design that assigns letter grades from A+ down to D to indicate the vehicle's fuel economy performance. If adopted, the new label would mark the biggest change to the fuel economy sticker in 30 years.

"The old petroleum-centric labels just aren't good enough anymore," National Highway Traffic Safety Administration chief David Strickland said at the new label's introduction on Monday, August 30.

The new labels are necessary because of the increasing number of electric and plug-in hybrid vehicles that are entering the marketplace, according to the EPA. Since these vehicles use fuel more sparingly — or not at all — new methods of calculating fuel economy are needed, the agency said. The EPA is seeking consumer feedback during a 60-day period to help it decide what elements work, and ultimately which designs to incorporate into the final label.

"We are asking the American people to tell us what they need to make the best economic and environmental decisions when buying a new car," EPA administrator Lisa P. Jackson said in a press release. "New fuel economy labels will keep pace with the new generation of fuel-efficient cars and trucks rolling off the line, and provide simple, straightforward updates to inform consumers about their choices in a rapidly changing market. We want to help buyers find vehicles that meet their needs, keep the air clean and save them money at the pump."

The label design with a letter grade immediately came under fire from auto industry groups. On its Web site, the National Automobile Dealers Association (NADA) said that it will "likely oppose any proposed label design that would mandate a letter grade for a vehicle's overall fuel economy and greenhouse gas emissions performance." NADA argues that the letter grades would confuse the buying public, make vehicle purchasing decisions more difficult and treat certain automakers or fuel types unfairly.

Dave McCurdy, president of the Alliance of Automobile Manufacturers, also was critical of car grading. "The proposed letter grade falls short because it is imbued with school-yard memories of passing and failing," McCurdy told The Wall Street Journal.

The two proposed designs contain mostly the same information, but it is presented differently in each. The label to which NADA and the Alliance of Automobile Manufacturers took an instant dislike does indeed prominently feature a letter grade that is based on the vehicle's fuel economy, and if adopted would be a major departure from the current sticker. The second label more closely resembles the current version, but adds more information to reflect new methods of calculating fuel economy. The EPA expects to make a decision by the end of the year, and the new label will first appear on 2012 models.

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